MARKETING MANAGEMENT

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SERVICE MARKETING:
Definition:
Services are defined as identifiable, intangible, activities that are the main object
of a designed to provide want-satisfaction to customers.
For marketing purposes, services are separated into two categories:
Services that are main purpose or object of transaction.
Eg: You rent a car from enterprise. The company makes a car available (A
tangible good). But what you are purchasing is accessibility to transportation.
Because you are buying the use of the car, not the car itself, this is a service
transaction.
Service that support or facilitate the sale of good or any other service.
Eg: When you rent a car from enterprise, you can also obtain collision
insurance, the use of a cellular phone, and an electronic navigational device. These
are called supplementary or support services because you obtain them only in
conjunction with renting a car.
NATURE AND IMPORTANCE OF

SERVICES:

Services are the major source of employment more than 80% of the non-farm
labor force is employed in service industries. The industries in which job
growth will be the fastest are data and information and management,
institutional and in home health care education and financial services.
The services account for over one half of consumer expenditures is
impressive, but is still grossly understates the economic importance of
services. And hence spending for business services. And hence spending for
business services will continue to grow.
As commerce has become increasingly complex and competitive, managers
have found that calling on specialized service providers is effective and
efficient. This is resulting in many tasks formerly performed by regular
employees, from research and training to advertising and distribution are
increasingly being Outsourced to specialists.

----------------------------------------------------------------------------------------------------------Mahesh Gowda S, DEPT OF MBA, SJ B IT, Bangalore

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MARKETING MANAGEMENT
-----------------------------------------------------------------------------------------------------------SCOPE OF SERVICES
Scope of services can be recognized both for Profit and non business services
organizations for profit services firms sell to consumers or other business with profitable
operations as a primary goal. This category is classified by industry:
_ Housing & other structures: Rental of offices, warehouses, hotels, motels, apartments,
Houses & firms
_ Household operations: House maintenance & repairs, security, landscaping &
Household cleaning
_ Recreation & Entertainment: Theatres, Spectator sports, amusement parks,
Participating sports, restaurant meals & resorts.
_ Personal care: Laundry, dry cleaning, spas
_ Medical & Health care: Physical & Mental medicinal services, dental, nursing,
Physiotherapy
_ Private Education: Vocational schools, nursery schools, continuing education
programs
_ Professional business services: Legal, accounting, advertising, marketing research,
public relations & Management consulting
_ Financial services: Personal & business insurance, banking, credit & loans service,
Brokerage service & investment councelling.
Non business service organizations are of two types. One type is not for profit
Service organization which have a profit goal because growth & continued existence
depend on generating revenue in excess. However PROFIT is secondary to the N-F-Ps
Primary objective. In many cases N-F-Ps operate in a fashion very similar to for-profit
Businesses eg.
_ Educational: Private grade schools, High schools, Colleges & Universities
_ Healthcare: Hospitals, Nursing homes, Health research organizations
_ Professional & Trade: Labor unions, Certificate groups, professional associations,
trade associations & lobbying groups
_ Social concerns: Organizations dealing with family planning, civil rights, termination
----------------------------------------------------------------------------------------------------------Mahesh Gowda S, DEPT OF MBA, SJ B IT, Bangalore
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MARKETING MANAGEMENT
-----------------------------------------------------------------------------------------------------------of smoking, environmental concerns.
The second type of non-business organization is a non-profit organization which
provides services but does not have a profit or surplus objective, eg.
Federal, State & Local Govt. agencies. The provide services, often charging for them &
may even operate in competition with for-profit businesses, eg.
U.S. National part service competes with private forms of outdoor recreation.
CHARACTERISTICS OF SERVICES
There are 4 characteristics that differentiate services from goods. They are:
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Intangibility
Inseparability
Heteroginity
Perishability

INTANGIBILITY
As services are intangible, it is impossible for prospective customers to sample- feel, see,
hear, taste or smell i.e a service before the buy it. Four promotional strategies that may
be used to suggest service benefits & reduce the effort of intangibility are:
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Visualization
eg. Carnival cruise lines depicts benefits of cruises

Association
eg. Connecting service with tangible goods. Prudential Insurance suggests
stability & security with its rock of Gibralter. Merrill Lynch

Physical representation
Eg. American Express uses colour gold or platinum for the credit card services
to symbolize wealth & prestige.

Documentation
There are 2 forms of documentation:
i) Past performance
eg. A hospital can document its past performance by pointing out in its ads how many
babies have been born & cared for in its obstetrics department.
ii) Future capability
eg. A hospital chooses to stress its capability by highlighting the specialized
----------------------------------------------------------------------------------------------------------Mahesh Gowda S, DEPT OF MBA, SJ B IT, Bangalore
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MARKETING MANAGEMENT
-----------------------------------------------------------------------------------------------------------equipment it has if an emergency arise during the delivery of a baby.
Websites are a vulnerable tool in reducing the intangibility of a service. They make it
possible for marketers to present extensive information, use animation & sound & answer
a site visitors specific questions via e-mail.
Eg. Royal Carribbean Cruise line.
INSEPERABILITY

Services cannot be separated from the seller of the service. Many services are
created, dispensed and consumed simultaneously.
Eg: Dentists create and dispense almost all their services at the same time
and they require the presence of the consumer for the services.
Service Inseparability means that service providers are involved concurrently in
the production and marketing efforts.
Eg: One physician can treat only so many medical patients in a day.
From a marketing standpoint inseparability limits distribution. It frequently means
that direct sale is the only possible channel of distribution and an individual
sellers services can be sold only when direct contact is possible.
An exception in this feature is some services are sold by a person wois
representing the creator-seller.
Eg: Travel agent , insurance broker etc.
HETEROGENITY

It is difficult if not impossible for a service firm, or even an individual seller of

services to standardize output. Each unit of the service is some what different
from every other unit of the same service because of a factor in production and
delivery.
Eg : Delta airlines does not give same quality of service on each flight, or
even to each passenger on the same flight.
PERISHABILITY

As a market commodity a service has a high degree of perishability. Time element

assumes unique importance. If a service is not used today it is lost for ever. It
cannot be stored. It cannot be carried forward. Utilized services are economic
losses.
Eg: A building unoccupied, a person unemployed, credit not utilized,
empty rooms in a 5 star hotel represents perishable nature of services.
----------------------------------------------------------------------------------------------------------Mahesh Gowda S, DEPT OF MBA, SJ B IT, Bangalore
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